US companies can no longer use foreign payments to cut taxes in two countries

The US Treasury just finalized rules that make it harder for companies to use certain payments and losses to reduce their tax bills in both the US and a foreign country. This means multinational corporations will have fewer ways to lower their global tax obligations using cross-border accounting strategies.

Multinational companies have used complex accounting strategies to reduce their tax burden across different countries. These new rules close specific loopholes, making it harder for companies to claim the same deduction in two different tax jurisdictions. This change aims to ensure large corporations pay a minimum level of tax, especially as global efforts push for more consistent corporate taxation.